E-commerce services providers are tripping over themselves to offer fast shipping services for merchants and their customers. Shopify is now getting into the fulfillment business in a big way by giving its merchants an alternative to Amazon shipping. Fast (and really fast) delivery has become a differentiating strategy for e-commerce and in-store retailers alike. Big fulfillment networks now support restaurant delivery that serves that take-out needs of consumers looking for convenience and immediacy. Also, major grocery chains like Kroger, Walmart, and Whole Foods are marketing fast delivery services. But warehousing and delivery logistics networks are major investments and take time to become operational. That’s why third parties such as Grubhub, DoorDash, Instacart, Shipt, and Postmates have established extensive fulfillment services. Will the emergence of so many logistics and delivery providers reach a point where some consolidation of players will start to happen? Stay tuned.
A Financial Post article discusses more on this topic which is excerpted below.
Shopify Inc. executives are loath to mention the competition by name, but the Canadian e-commerce service provider is directly taking aim at Amazon.com Inc. by launching a network of fulfilment warehouses and shipping logistics capabilities in the United States. By the end of this year, Shopify says that it will be able to offer two-day shipping for the hundreds of thousands of American merchants on their retail platform.
“We plan on spending over $1 billion to build and operate the Shopify Fulfillment Network over the next few years,” chief product officer Craig Miller said during the keynote presentation at Shopify’s annual Unite developer conference.
“So this is another example of how Shopify is democratizing commerce by taking the warehouse systems, machine learning and other technologies that used to be reserved for only the largest companies in the world, and making them accessible and affordable to all merchants including those that are just starting to take off.”
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group